Juan Alayo, former Hempstead co-op board president, pleads guilty to stealing almost $30G, AG says

A former Hempstead Village co-op board president has pleaded guilty to stealing almost $30,000 in co-op funds, New York State Attorney General Letitia James announced Friday.

Juan Alayo, 72, of East Meadow, pleaded guilty Thursday to grand larceny, a felony, and petit larceny, a misdemeanor, after he was caught embezzling more than $26,000 by writing checks to himself and his cleaning company and falsifying co-op business records to hide his thefts, according to a news release from James’ office.

Residents of the Hendrickson Avenue building alerted authorities when they reviewed co-op records after Alayo moved out, prosecutors said.

"Juan Alayo’s neighbors elected him to oversee their building, and Mr. Alayo violated their trust to line his own pockets," James said in a statement.

A lawyer for Alayo, Garden City-based Jack Posner, declined to comment. Alayo could not be reached Friday.

Under the terms of the guilty plea, Alayo will reimburse the co-op and complete 210 hours of community service or go to jail for a year, prosecutors said.

Alayo was elected by neighbors from 2016 through 2023 to lead the board of the Marlboro Owners Corp. The 16 garden-style apartments were built in 1963, according to Nassau County property records. 

Alayo’s position paid him $200 per month and entailed scheduling building maintenance and keeping co-op business records. Prosecutors described a scheme, discovered by the new board president after Alayo moved out of the co-op, in which Alayo wrote and cashed checks to his company, A & J Cleaning Services, that were made to look as if they were for legitimate co-op expenses. 

For example, prosecutors said, a $2,466.30 check he recorded in co-op books as payable to Tragar Home Services, a legitimate home heating and cooling company, was actually sent to and cashed by A & J. In an email, Tragar president and CEO Dennis Traina said the co-op had been a "valued client" since 2019 and there were "no transactions in the account records that correspond to the value of the check in question."

Mindy Eisenberg Stark, a Westchester-based certified public accountant and certified fraud examiner, said the co-op appeared to have lacked internal controls that would have prevented fraud. "Generally you have a management company and a board treasurer. The company gives monthly management reports to the board, who should be reviewing those reports to see if there's malfeasance," Stark said.

Many co-op bylaws also require an annual audited financial statement.

In general, she said, "There needs to be segregation of duty, and other sets of eyes" on finances.